POSC 1000
Introduction to Politics
Russell Alan Williams
Unit Ten:
Globalization and Political Economy and
Conclusion (April 1 and 3)
Required Reading: MacLean and Wood, Chapters 13
and 14.
Outline:
Introduction - IPE
2. The Trade Regime
3. The Financial Regime
4. Conclusion – Essays and Final Exam
1.
1) Introduction:
“International Politics Economy”: Subfield of
“International Politics”.
Studies the interaction between economics and politics.
Assumes a close link between international and domestic
politics
Theories and debate focuses on implications of economic
interdependence
• E.g. “Globalization”: Intensification of economic, political,
social, and cultural relations across borders.
“Globalization” highlights the transition
from nationally organized economies
to an era of liberalization and
economic cooperation
“Trade Protection/Protectionism”:
Tendency of countries to safeguard their
own economic interests by using tariffs,
quotas or other forms of trade and
investment legislation.
Many international institutions now exist to
promote “liberalization”
• E.g. The WTO, IMF, WB, EU, NAFTA –
involve rules about what states are
allowed to “do”.
Development of a global market and society
runs counter to nationally based political
systems.
2)The Trade Regime:
International Political Economy analyzes the content and
implications of the “trade regime” . . .
The General Agreement on Tariffs and Trade (GATT)
– An international treaty that limits states’ rights to engage
in “trade protection” 1945 -> Present
Promotes:
• “Non-Discrimination” : Principle that no member of an organization
should be excluded from the benefits that one member state extends to
another.
• “Reciprocity”: Complementary or mutual behavior between two or
more actors; view that mutual liberalization of trade barriers would be
beneficial to all parties
GATT liberalization was very successful
2)The Trade Regime:
2)The Trade Regime:
International Political Economy analyzes the content and
implications of the “trade regime” . . .
The General Agreement on Tariffs and Trade (GATT)
– An international treaty that limits states’ rights to engage
in “trade protection” 1945 -> Present
Promotes:
• “Non-Discrimination” : Principle that no member of an organization
should be excluded from the benefits that one member state extends to
another.
• “Reciprocity”: Complementary or mutual behavior between two or
more actors; view that mutual liberalization of trade barriers would be
beneficial to all parties
GATT liberalization was very successful
However, there were considerable problems with cheating
and enforcement
GATT “Uruguay Round” of trade
negotiations led to the creation of the World
Trade Organization (WTO) in 1994
Included a new binding system of “Dispute
Resolution”: Process by which trade
disagreements between states can be resolved
by an impartial tribunal
System requires that states change offending policies
Included many new requirements for state
behavior
MNC intellectual property rights
MNC investment protection
“Single Undertaking” – acts like a constitution
WTO is very controversial: promotes
liberalization but reduces “sovereignty”
3)The Financial Regime:
International Political Economy analyzes the content and
implications of the “financial regime” . . .
“International Financial and Monetary System”: Set
of rules, institutions, and agreements governing the flow of
money in the international system; the relative value of
currencies and the settling of accounts.
Necessary to all international trade, travel and commerce
System is governed by World Bank, IMF and leading states . . .
• Goals:
– Stability
– “Liquidity”: Rate at which assets can be converted to cash
– Development – many states are “capital poor”
Economic development requires capital transfers to poor
societies . . . .
World Bank and IMF are designed to provide loans to
governments facing economic problems
“Bilateral Aid”: Military or financial development
assistance given by one state to another.
The “Marshall Plan”: US bilateral Aid to European states after
World War II to finance reconstruction
Development assistance has never matched the needs of
many poor countries
Economic development requires capital transfers to poor
societies . . . .
World Bank and IMF are designed to provide loans to
governments facing economic problems
“Bilateral Aid”: Military or financial development
assistance given by one state to another.
The “Marshall Plan”: US bilateral Aid to European states after
World War II to finance reconstruction
Development assistance has never matched the needs of
many poor countries
E.g. “Debt Crisis”: Situation in which a country cannot meet its
international debt payments. Sometimes used to refer the LDC debt
crisis in particular (1982-????)
4)Conclusions
The study of international political economy highlights
some basic problems with the modern study of politics . . .
.
Focus tends to be on governments, elections and political parties,
but in the era of “globalization” more and more of the decisions
that impact peoples’ lives are made outside of those national
political processes.
Raises questions about “sovereignty” and democratic
accountability
5) Final Exam:
Final Exam has three components covering the
course as a whole – Multiple Choice, Short answer
definition questions and long answer essay
questions - See Handout
6) Essays: